Stock Market Bounce May be Over
Stock-Markets / Stock Markets 2016 Jun 28, 2016 - 03:12 PM GMT
Good Morning!
It appears that SPX has retraced to the 2-hour Cycle Bottom in the Premarket. The bounce may be over. We’ll know more after the open.
ZeroHedge reports, “After a historic two-day selloff, which as shown yesterday slammed European banks by the most on record...
... the wildly oversold conditions, coupled with hopes for yet another global, coordinated central bank intervention, coupled with modest hope that David Cameron's trip to Brussels today may resolve some of the Article 50 gridlock, have been sufficient to prompt a modest buying scramble among European stocks in early trading, with the pound and commodities all gaining for the first time since the shock Brexit vote.”
Yesterday investors started taking off their hedges, thinking the worst is over. Bloomberg reports, “Say what you want about U.S. equity investors after the U.K. vote on the European Union. Just don’t say they were unprepared.
The precautions taken by traders to hedge against Brexit are playing out in today’s market, where options-derived measurements of market stress are actually falling despite a second day of weakening stocks.”
They may be premature. A considerable amount of damage has been done already.
The European Financials ETF shows only the first wave down with a retracement underway. This index appears broken. A third wave may begin later today.
TNX attempted a retracement, but appears to have reversed. This may be an initial indication that the bounce may be over.
Regards,
Tony
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